St. James's Place profit up 9 percent on asset boost

LONDON (Reuters) – British wealth manager St. James’s Place posted a 9 percent rise in full-year operating profit on increased funds under management, driving a forecast-beating dividend payout, while 2019 began well due to a stock market recovery.

SJP, which provides a range of financial services to wealthy individuals, said strong demand for its services had seen net inflows during the year to December 31 of 10.3 billion pounds, taking total assets to 95.6 billion pounds, despite a weaker market backdrop into the year-end.

Since the start of 2019, however, a stock market recovery and further inflows had helped push total assets to around 102 billion pounds, although the pace of flows was slower than at the same time in 2018, it said in a statement on Wednesday.

“This bodes well for continuing cash earnings momentum,” JPMorgan analyst Ashik Musaddi said in a note to clients, reiterating an ‘overweight’ rating on the stock and flagging SJP’s “best in class organic growth prospects”.

The increase in assets helped operating profit on a European embedded value (EEV) basis rise to 1 billion pounds at end-December, from 918.5 million pounds a year earlier, in line with a company supplied consensus forecast.

New business profit of 852.7 million pounds beat the consensus forecast of 15 analysts for 842.3 million pounds.

That in turn helped the company’s underlying cash result increase by 10 percent to 309 million pounds, underpinning a final dividend of 29.73 pence a share and a full-year dividend of 48.22 pence a share, up 12.5 percent on the year earlier.

“The financial performance of the business reflects the progression of funds under management together with the contribution of new inflows in the year, resulting in good growth across all our key financial metrics,” Chief Executive Officer Andrew Croft said in the statement.